When hospice reverts to the lowest common denominator and leaders obsess about metrics, it's time to speak. Self-inflated leaders assume clinicians give until their backs break, given no raises for years. A clinical ladder is a rainbow’s pot of gold. Others have a sorrier job and must be motivated by money. Abysmal leaders dangle extrinsic rewards for admission, hiring and EDBITA targets. “Sign on” bonuses entice people into a poor work environment. Employees’ voice equals their raise, zero.

Thursday, August 28, 2014

Thought your readers might enjoy these in honor of the upcoming Labor Day weekend. Gentiva's overall rating on Glassdoor fell by 12% from six months ago, The Employee Relations bar continues its free fall at Gentiva. Then again, these could be Human Abuse stretch goals. How many employees were laid on the rack this week?

Monday, August 25, 2014

The Gentiva Board of Directors, the group that will decide who wins the company, said this a few months ago:

In nominating Mr. (Tony) Strange for re-election as a director, our Board of Directors focused on his leadership and execution as our chief executive officer in growing Gentiva, his driving and integrating significant acquisitions by Gentiva and his setting and communicating the proper cultural and behavioral tone as important attributes and experience for his continuing to serve as one of our directors.

It's hard to see how Tony grew hospice. He finally confessed to Wall Street analysts he didn't have the key to unlock hospice marketing. The Harden acquisition resulted in many hospices closing via a "branch rationalization."

The proper cultural and behavioral tone flowed down to the site level where we experienced no raises for years, until the paltriest crumb fell from the executive table. However, we're back to no raises again. Apparently we did not show enough gratitude for the morsel senior leaders tossed our way.

Strange does thank employees at the end of each investor call for what we do on a daily basis to enrich him and those who will decide our fate in the buyout. I imagine all 42,000 Gentiva employees saying in unison, "Our pleasure!"

Everything about Gentiva is exceptional and it starts at the top. I frequently take exception to them and their myopic actions. Our leaders are unusual, uncommon, atypical and abnormal. I'll add another "a word", abysmal. It's the outcome of a health care world with the absolute wrong priorities.

Thursday, August 21, 2014

Two bidders remain for Gentiva, Kindred and an unnamed investment firm. They are in due diligence at the moment sharpening their pencils for a possible higher bid. Benzingareports that Kindred may have the upper hand.

They suggest the unnamed investment firm is Formation Capital. owner of long term care provider Genesis. Genesis is in the process of merging with Skilled Healthcare in a stock only deal. Benzinga's story believes this stock deal would consume Formation Capital's time and resources, making it more likely Kindred will win Gentiva.

A stock for stock deal doesn't seem complex. It does not require arranging any debt to fund the combination. It's more like a merger than an acquisition.

Formation Capital has five unrealized affiliates, all in the post acute health care space. Formation does not need to combine Gentiva with Genesis. It could acquire Gentiva and keep it a stand alone company. It could roll in its existing hospice and home health companies, LifeChoice Hospice (seven hospices) and Millenium Home Health (twelve home healths), which have nothing to do with Genesis.

Gentiva considered calling its higher interest debt in September 2014 and arranging lower rate financing. It wanted to acquire other businesses in the hospice, home health and community care space. Conceivably, Gentiva could remain a wholly owned Formation affiliate and fulfill this previously stated vision.

What if the unnamed investment firm is not Alpharetta based Formation
Capital? That means its back to the bidder with the deepest pocketbook
and ability to raise debt.

Gentiva senior leaders would love to be acquired by an investor that
believes in them and their vision. That sole criteria would give the
unnamed investor an upper hand in the Gentiva boardroom. The Ides of September should reveal Gentiva's winner. Expect lots of silence until then.

Thursday, August 14, 2014

On or about June 19, 2014, the Company received a Civil
Investigative Demand from the U.S. Department of Justice, Western
District of Missouri, under the federal False Claims Act requesting
complete medical records for 14 hospice patients and other documents of
Hospice Care of the Midwest, L.L.C., a subsidiary of Harden Healthcare
Holdings, LLC (“Harden Holdings”), for the period from January 1, 2009
through June 19, 2014. The Company is in theprocess of complying with
the demand for documents and is cooperating with the investigation.

What a difference ten days made in the telling of a prior story:

On or about June 9, 2014, Iowa Hospice, L.L.C., a subsidiary of
Harden Holdings, received a Subpoena Duces Tecum (“Subpoena”) from the
Office of Investigations, Kansas City Regional Office of the Office of
Inspector General of the Department of Health and Human Services. The
Subpoena requests complete medical records for 17 hospice patients and
other documents of Iowa Hospice, L.L.C. for the period from January 1,
2007 through June 9, 2014. Harden Holdings is in the process of
complying with the Subpoena and is cooperating with the investigation.

I wasn't sure there were any Harden Hospices left, given Gentiva acquired 69 then closed 50. At least two remain and those are being investigated.

Sunday, August 10, 2014

For 2014, we now expect full year net revenues to be in the range of
$1.96 billion to $2.0 billion. Additionally, we have raised the lower
end of our full year 2014 adjusted EBITDA guidance to $183 million to
$195 million and our adjusted income attributable to Gentiva
shareholders to $0.95 to $1.15 on a diluted per share basis. This
outlook includes the full year impact of the Harden acquisition and the
final 2014 Medicare Home Health and Hospice reimbursement rates issued
by CMS, but excludes any ongoing losses from closed or sold locations as
they are wound down and any acquisition-related expenses.

On a pro-forma basis the company should be able to generate revenues
between $2.1 and $2.2 billion, while adjusted EBITDA should come in
between $210 and $220 million, excluding share-based compensation.

That's a revenue shortfall of $104 to $200 million and EBDITA gap of $25 to $27 million from prior expectations.

Excluding acquisition related expenses is interesting. Gentiva is spending big bucks on recruiting a suitor that will keep their top management team in place. Barclays Capital, Greenberg Traurig, Kekst, Edge Healthcare Partners and MacKenzie Partners don't work cheap. Will those costs ever be revealed?

CapEx, probably expected to stay fairly consistent. We're kind of in
that $3 million-a-quarter mode. There's a little bit of increase, but
moderate. As we have talked about, we -- the last piece of our
integration work is to convert the Harden Home Health over to our
GentivaLink system in the third quarter. By no means is that a
significant amount, but that's a moderate increase for Q3, as that is
completed this quarter. Other than that, when I look at what's in there
and the expectations, I don't see anything significant beyond that
roughly $3 million, $3.5 million a quarter.

Gentiva, with $2 billion in expected revenues, will spend a mere $12 to $14 million on capital items. That's a mere 0.6% to 0.7% of net revenues. Amedisys, with $1.25 billion in revenues in 2013, spent $18 million on capital expenditures.

A commenter suggested Gentiva leaders are spit shinging the financials for potential buyers. Today's underinvestment could be tomorrow's higher stock price. A few months ago a Gentiva executive stated:

We've had some rocky years. In
this industry there's been a negative environment that's been out there
in both the home health and hospice. We all hope that will subside over
time and we'll get back to focusing on the patient need, patient care and the industry will start to climb again.

With attention on deals, deals and more deals and driving costs out via the OneGentiva initiative, patient need and patient care remain on the back burner.

Management is clear on their priorities. How many patients are aware of Gentiva senior leaders' needs? Patients, especially those on hospice, should feel them directly or indirectly. I pray it's not a direct hit from the Gentiva leadership bus.

If turnover costs Gentiva $25,000 per job our branch manager cost the company well over $1 million in a few short years. Our Medical Directors are tired of training nurses for our competitors, but the company seemingly does not care.

Of course it's hard to market chaos to prospective patients. It's even harder to recruit good staff with an "abused ex-Gentiva" club in the community doing their best to enact revenge. Our hospice deserves so much better from the company. What goes around, comes around. The question is when?

It can't happen until they wake up from their delusion. "The stock certificates were hung by the chimney with care, with hopes that the White Knight would soon be here..."

Gentiva CEO Tony Strange beat the "hospice marketing equals home health
marketing" drum for nearly two years on investor calls. When hospice volumes didn't go up
as predicted, Strange finally admitted they weren't the same. Yet, the OneGentiva
reorganization includes:"Each region will have a single-sales organization focused on the
delivery of a unified comprehensive service offering to our referral
sources. However, the product delivery systems for the 3 business lines
will continue to function separately as they do today."

If Gentiva hadn't unlocked the key to hospice marketing as a stand alone group, how will it do so in a unified offering?

It didn't. OneGentiva's third aim was to improve hospice revenues. Wall Street is still waiting. Longtime hospice staff shake their heads.

Gentiva yet again went in the opposite direction on deleveraging.

Our consolidated leverage ratio for the quarter was approximately 5.9 under our credit agreement.

However, Tony Strange was excited about cost reductions imposed:

I think David and the operating team -- division team here, Jeff and
the 5 presidents in the field, I think they have done yeoman's work in
getting out ahead of the costs on the cost side of One Gentiva. So I
think from a cost perspective, I would tell you that we are where we
expected to be or even further along from where we expected to be.

Those cost reductions included critical office staff and clinicians, at least in our hospice. Our service pales in many ways from where we were.

Saturday, August 2, 2014

I appreciate your posts on the business side of hospice. It's something I don't resonate with. As a matter of fact, it generally makes me very uncomfortable. But I do have some understanding of people and the ways we cause harm to one another.

Most of us act out programs from earlier in life and do so completely unaware. Some courageous people become aware of and face hurts from the past, which can be deep. Others are so damaged they cannot. They built psychological structures to protect themselves as children and see maintaining these structures as core to their safety in each and every moment.

Unfortunately, these structures cause them to project their torments onto others. I venture your hospice director is such a person. This is very hard to detect in a corporate structure which relies on surface interactions and generally has no understanding or tolerance for depth.

Your leader utilizes those longstanding psychological structures, which saved them as a child, to maintain their image with their corporate bosses. This means any negative is externalized to subordinates who've failed, despite this manager's best efforts. Facts don't matter. An employee could be an outstanding nurse, chaplain, marketer, social worker, volunteer coordinator but they can quickly have their character assassinated by a site manager with a pristine image to maintain.

Corporate, with its over reliance on surface matters, cannot detect human resource patterns, whether it be in this person's evaluations of others (generally abusive). Corporate processes and reprocesses job openings where this manager repeatedly hires "stars," later firing those who haven't already quit for gross inadequacies. The bureaucracy does not monitor employee satisfaction, but rapidly circles wagons when enough staff quit or express widespread concern. Corporate ignores exit interviews or allows the abusive leader to conduct their own, the final torment for many. Even in leaving the employee cannot be heard.

Should pressure rise on this manager blame is delegated in sprinkler life fashion. Everyone can and will be sacrificed to maintain their image and status. Yet, corporate does not see this. Why? Because in one on one sessions with their bosses this manager will pretend to be vulnerable. They will cry, highlighting how hard they work and how consistently others let them down. They pretend to accept responsibility, but only in the most surface manner. When their boss is gone there's hell to pay for the humiliation they've had to endure.

Bosses like this can give an order. If it goes badly, thirty minutes later they can deny they ever gave the order. That happened to me more than once. I quickly realized this manager and I literally live in different worlds.

How can corporate love someone like this? It's resonance. They mirror one another. Both care solely about surface images. Damaged managers know whose approval is needed and how to curry it. Substance and nuance, the very things hospice patients and families need, aren't wanted.

Hospice work is difficult enough. Layer a psychologically damaged
leader and uncaring corporate structure and it becomes hell. I expect
this is where your site remains.

You've shared that the buyout has likely steered management attention away from discovering the Gordian knot spun by your manager. Yet, someone commented here that top leadership is trying to identify me and you. It seems we've tarnished the shiny image they wish to portray. I couldn't care less about Gentiva, but that's your bread and butter.

My focus is hospice and its dire state of service, which I see driven by bad management, obsessed with money and metrics. You are trying to provide caring, supportive service in one hospice community and are handcuffed by a tormented manager and clueless corporation. Godspeed. This too shall pass, possibly after it all implodes.

Friday, August 1, 2014

Gentiva's suitors must factor in recent market volatility as they face the prospect of increased interest rates. Will Kindred and the unnamed White Knight rush their due diligence, hoping to lock in any new debt at dirt cheap rates? A financial expert noted:

As companies pay more in interest on borrowed money corporate earnings
can drop reducing the stock price. Companies vary as to how sensitive
they are to this risk.

Gentiva is already bloated with debt, much of it recently refinanced at low rates as part of the Harden acquisition. The bigger the corporate mortgage the less money the company has to spend on other things, like employee salaries and benefits. These have been low on the priority list for years.

Gentiva will be sold, unless the credit market collapses. The question is who'll buy, how much they'll borrow and at what rates?

The move comes amid rising demand this year for the riskiest corporate bonds from investors frustrated by low interest rates on historically safer investments.

There have been signs lately, however, that the rally may be waning. Prices on bonds issued by lower-rated U.S. companies tumbled last week to a three-month low, according to a Bank of America Merrill Lynch index. Bond yields rise when their prices fall.